Salt Lake Hardware Co. v. Commissioner
United States Board of Tax Appeals
1. Petitioner, a domestic corporation, received from another domestic corporation stock dividends which were later redeemed at par for cash.
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1. Petitioner, a domestic corporation, received from another domestic corporation stock dividends which were later redeemed at par for cash. Held, such redemption was not equivalent to the distribution of taxable dividends under section 201(g) of the Revenue Act of 1926. Held, further, the amounts paid to redeem the stock constituted amounts distributed in partial liquidation, under section 201(c) and (h) of the Revenue Act of 1926. 2. Respondent's determination of the basic value of the stock sustained.
1Opinion of the Court
*485OPINION.
Maequette:
The petitioner contends that the payment to it of $60,000 in 1926 and of $40,000 in 1927, in redemption of preferred stock issued as dividends, was “ essentially equivalent to the distribution of taxable dividends ” under section 201 (g) of the Revenue Act of 1926. If that contention is correct, then such dividends are not taxable income to the petitioner by virtue of section 234 (a) (6) of the act.
The respondent takes the position that, as dividends received by a corporation are not taxable as such, therefore the term “taxable dividend ” as used in section 201 (g) was not…
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- Johnson v. CommissionerUnited States Tax Court · 1944
- Natwick v. CommissionerUnited States Board of Tax Appeals · 1937
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